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When the construction task cannot be approximated reasonably, the zero-profit method is used because IFRS will not allow the gross-income solution to be used. FOR ALL OF US GAAP the cost-to-cost percentage of completion technique is certainly prohibited unless the contract specifically says or else. The completed-performance method may be the generally accepted technique under GAAP. However, whenever a reasonable estimate cannot be made, the finished-contract method must be used.
The precise differences are too many to cover in a short presentation, however, a conclusion of some major variations are mentioned below. Currently, nearly all countries in the world follow International Financial Reporting Standards guidelines; however, america still uses Generally Accepted Accounting Principals. Construction contracts are also an area where the recognition of revenue differs between the two accounting frameworks. Using this device it will be possible to lessen any color issue that you might be having.
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